Wells Fargo Bank v. Apache Tribe of Okla.

360 P.3d 1243

2015 OK CIV APP 10

WELLS FARGO BANK, NATIONAL ASSOCIATION, Plaintiff/Appellee,

v.APACHE TRIBE OF OKLAHOMA, Defendant/Appellant.

No. 110,194.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma, Division No. 2.

April 4, 2014.

Jon E. Brightmire, Doerner, Saunders, Daniel & Anderson, L.L.P., Tulsa, Oklahoma, for Defendant/Appellant.

Patrick M. Ryan, Phillip G. Whaley, Ryan Whaley Coldiron Shandy PLLC, Oklahoma City, Oklahoma, and Jerome A. Miranowski, Michael M. Krauss, Faegre Baker Daniels LLP, Minneapolis, Minnesota, for Plaintiff/Appellee.

Opinion

JOHN F. FISCHER, Presiding Judge.

¶ 1 This case arises from Wells Fargo Bank's efforts to collect the balance of a $4,365,000 loan to the Apache Tribe of Oklahoma. The Tribe appeals various rulings of the district court in these consolidated appeals.¹Principally, the Tribe challenges the district court's Judgment confirming an arbitration award in favor of the Bank, arguing it did not waive sovereign immunity or consent to be sued in Oklahoma district court. We find that there was a valid and express waiver of the Tribe's sovereign immunity, that the Tribe's agreement to arbitrate this dispute with the Bank is enforceable and that the arbitrator did not exceed his authority in awarding the Bank the unpaid balance of its loan. Therefore, the district court's Judgment confirming that portion of the arbitration award is affirmed as are the subsequent orders issued in aid of the Bank's effort to collect its Judgment.²

BACKGROUND

¶ 2 The Apache Tribe of Oklahoma is a federally recognized Indian tribe. The Tribe adopted a Constitution in 1972. Pursuant to Article II of that Constitution, the members of the Tribe who are at least eighteen years of age constitute the General Council and the General Council is the “supreme governing body” of the Tribe.³The Business Committee of the Apache Tribe of Oklahoma was established by the tribal council pursuant to authority granted in Article V of the Tribe's Constitution: “There shall be a business committee which shall consist of the officers as provided in Article IV and two (2) members.” On August 26, 1972, the tribal council passed Resolution 73–1 delegating the Tribe's “full and complete authority to the Business Committee to transact any and all business related to the tribe involving matters such as tribal land, tribal budget and any other matters relating to government programs and the Bureau of Indian Affairs....” On September 10, 1977, the tribal council passed Resolution 78–7 to “go on record similar to Resolution 73–1 to delegate authority to transact business related to the Apache Tribe of Oklahoma” to the Business Committee.

¶ 3 On May 9, 2006, the Tribe opened its Silver Buffalo Casino in Anadarko, Oklahoma. In August of 2007, members of the Business Committee and Wells Fargo Bank discussed a possible loan in the amount of $4,365,000. The loan proceeds were intended to be used by the Tribe to pay off existing debt, expand and remodel the Casino and to acquire land. On June 23, 2008, the Business Committee, by a vote of 3 to 0, adopted Resolution 06–23–08 approving the financing transaction with the Bank and the documents necessary to complete the loan transaction. The Resolution contained an express waiver of the Tribe's sovereign immunity. Also on June 23, 2008, the Business Committee signed a loan agreement, promissory note, security agreement and related documents (Loan Agreement) with the Bank to complete the loan transaction. The Loan Agreement included a waiver of the Tribe's sovereign immunity with respect to the loan transaction, an agreement to arbitrate disputes with the Bank and a choice of law provision designating Oklahoma law for the construction and enforcement of the Loan Agreement.

¶ 4 Paragraph 11.19 of the Loan Agreement titled “Governing Law,” provides, in part:

(a) This Agreement and the Loan Documents shall be governed by, construed and enforced in accordance with, the internal law of the State of Oklahoma.... The [Tribe] ... consents to the application of Oklahoma civil law to the construction, interpretation and enforcement of this Agreement and the other Loan Documents, and to the application of Oklahoma civil law to the procedural aspects of any suit, action or proceeding relating thereto, including, but not limited to, legal process, execution of judgments, enforcement of any arbitration award and other legal remedies....

¶ 5 Paragraph 11.24 of the Loan Agreement provides, in part:

(a) Arbitration.Upon the demand of any party, any Dispute ... shall be resolved by binding arbitration in accordance with the terms of this Agreement. A “Dispute” means any action, dispute, claim, or controversy of any kind, whether in contract or tort, statutory or common law, legal or equitable, now existing or hereafter arising under or in connection with, or in any way pertaining to any of the Loan Documents....

(b) Governing Rules.Arbitration proceedings shall be administered by the American Arbitration Association (“AAA”) or such other administrator as the parties shall mutually agree upon in accordance with the AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be resolved in accordance with the Federal Arbitration Act.... Judgment upon any award rendered in an arbitration may be entered in any court having jurisdiction....

¶ 6 Paragraph 11.27 of the Loan Agreement is titled: “WAIVER OF SOVEREIGN IMMUNITY; CONSENT TO JURISDICTION, and provides, in part:

(A) THE [TRIBE] HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ITS SOVEREIGN IMMUNITY (AND ANY DEFENSE BASED THEREON) FROM ANY SUIT, ACTION, OR PROCEEDING (INCLUDING AN ARBITRATION PROCEEDING) OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT POWERS, OR OTHERWISE) IN ANY FORUM, WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY....

(B) THE [TRIBE] HEREBY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE COURTS OF THE STATE OF OKLAHOMA....

....

(D) IN THE EVENT A SUIT IS COMMENCED ON THIS AGREEMENT ... (INCLUDING FOR THE ENFORCEMENT OF AN ARBITRATION AWARD), THE [TRIBE] COVENANTS THAT IT WILL NOT DISPUTE THE JURISDICTION OF THE COURTS OF THE STATE OF OKLAHOMA.... (emphasis in original).

¶ 7 After consummation of the loan transaction and transfer of the loan proceeds, the Tribe failed to make the interest payment due on the loan for August of 2010.⁴The Bank filed its request for arbitration on September 28, 2010, alleging the Tribe had breached the loan agreement. The parties selected an arbitrator and on May 23, 2011, after five days of trial, the arbitrator entered an award in favor of the Bank in the amount of $2,751,160.20 (Arbitration Award). The Bank filed this action in the district court on May 24, 2011. The district court confirmed the arbitration award and entered judgment in favor of the Bank on November 15, 2011.

¶ 8 On March 19, 2012, the Bank obtained a temporary restraining order prohibiting the transfer of casino funds, other than winnings, until further order of the district court, and the matter was set for hearing on the Bank's motion to require the Tribe to turn over casino funds in satisfaction of the Bank's Judgment. On March 27, 2012, the district court denied the Tribe's motion to vacate the March 19 order. On April 3, 2012, the district court granted the Bank's pending motion and ordered the Tribe to turn over $130,000 “from casinos' money” to counsel for the Bank.

¶ 9 Four orders have been appealed and are consolidated for review in this case:

1. November 15, 2011, Order and Judgment Confirming Arbitration Award, case number 110,194 (Judgment);

2. March 19, 2012, Order Granting Temporary Restraining Order (Injunction⁵) and March 27, 2012, Order Denying Apache Tribe of Oklahoma's Motion to Vacate March 19 Order Granting Temporary Restraining Order (March 27 Order), case number 110,548; and

3. April 3, 2012, Order Compelling the Turnover of Cash Held at the Silver Buffalo and Golden Eagle Casinos (Turnover Order), case number 110,648.

Oral argument was held in this Court with respect to the Tribe's appeal in case no. 110,194 on August 13, 2013.

STANDARD OF REVIEW

¶ 10 In confirming the Bank's arbitration award, the district court determined, as did the arbitrator, that the parties agreed to arbitrate any dispute regarding the Loan Agreement. The district court's “first task” in ruling on that issue “is to determine whether the parties agreed to arbitrate that dispute.” Wilkinson v. Dean Witter Reynolds, Inc.,1997 OK 20, ¶ 9, 933 P.2d 878, 880, citing Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc.,473 U.S. 614, 626, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985). That determination is generally governed by principles of state contract law. First Options of Chicago Inc. v. Kaplan,514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); Rogers v. Dell Computer Corporation,2005 OK 51, ¶ 14, 138 P.3d 826, 830. We review the district court's legal decisions regarding the existence of an agreement to arbitrate de novoand accept its findings of fact that are not clearly erroneous. Kaplan,514 U.S. at 947–49, 115 S.Ct. at 1923.

¶ 11 However, to the extent the parties have agreed to arbitrate their disputes, judicial review of the substance of the arbitration award is constrained. A court “will set [an arbitrator's] decision aside only in very unusual circumstances.” Kaplan,514 U.S. at 942, 115 S.Ct. at 1923(citing Title 9 U.S.C. 10 (2002)). As pertinent to the Tribe's appeal, the arbitration award may be vacated if “the arbitrators exceeded their powers.” 9 U.S.C. 10(a)(4) (2002).⁶

¶ 12 The Tribe's appeal of the district court's post-Judgment orders raises only issues of law. “Questions of law are reviewed de novo.De novoreview of a lower court's legal ruling is plenary, independent and...